Georgetown utility staff propose modest base-rate increase to help fund $260 million grid expansion

Georgetown electric utility staff on a council workshop presented a proposed change to retail electric rates that would raise base-rate revenue roughly 1.8% systemwide (staff and consultant described this as a 2% retail sales revenue recommendation and a 2.1% increase to each base-rate element).

Michael Simpson, portfolio analyst with the electric utility, told Mayor and Council the utility expects load to grow nearly 100% by fiscal 2030 and that the capital plan to serve that growth will require “a little over $260,000,000 in the electric system over the next 5 years.” He said maintaining strong financial metrics on a standalone basis for the electric utility is critical to preserving favorable interest rates and that without a rate change the utility would not meet targeted coverage ratios in fiscal 2026–27.

Scott Burnham, partner at NewGen Strategies and Solutions, described the cost-of-service and rate-design work used to translate the revenue need into class-level rates. He said the analysis used a two-year test period (FY26–27), netted nonretail revenues (contribution in aid of construction, plant-investment fee, interest and other nonrate revenue) and allocated costs to customer classes before proposing rate changes.

The recommendation is not to change the power-cost-adjustment (PCA) or the recently adopted very-large commercial and industrial energy rate rider. Instead, NewGen proposed increasing base-rate elements by 2.1%, which NewGen said equates to about a 1.8% system revenue increase (rounded to roughly 1.9% by class in presentation slides). NewGen showed residential bill impacts at common usage levels (500–1,500 kWh) of roughly $1.50 to $3.50 per month (about a 1.9% percent change).

Key assumptions and figures presented by staff and consultant included: 3.5% organic load growth; discounted large-account forecasts provided by customers; 33 MW per year of incremental load assumed for contributions in aid of construction and plant-investment-fee revenue; purchase-power costs assumed at about $87 per MWh for native load and roughly $72 per MWh for very-large load; operations-and-maintenance budgets through June 2025; CIP funded 23% cash with 4.5% interest on debt-funded portion; and separate allocation of the control center between electric and water in FY26.

Simpson and Burnham emphasized the distinction between ‘‘revenue percent’’ and ‘‘rate percent’’ (small rounding effects) and that the proposal focuses on base rates rather than riders or PCA. Burnham also presented regional comparisons the utility prepared showing Georgetown’s average residential bill against nearby providers at 1,000 kWh and 2,000 kWh.

No formal council vote was recorded during the presentation; staff accepted questions and said they will return if Council requests further modeling (for example, shifting more of an increase to other classes instead of residential). Staff noted an effective date for the change would be Oct. 1 if adopted later in the budget/rate process.

The workshop presentation and consultant study will be part of materials councilors use during upcoming budget/rate decisions; staff indicated they would model alternate rate-design scenarios on request.